DTV converter boxes could run out, industry warns

February 6, 2009 1:51:33 PM PST

By PETER SVENSSON AP Technology Writer

NEW YORK (AP) - February 6, 2009 --

Stores could soon run out of the federally subsidized boxes that let an older TV set receive new digital signals, the Consumer Electronics Association has warned. Manufacturers stopped making the boxes in early January, expecting that demand would peak around Feb. 17, when U.S. full-power TV stations were slated to turn off their analog signals. However, Congress this week voted to extend the deadline to June 12.

As talk of a delay grew last month, manufacturers restarted their converter-box assembly lines, said Michael Petricone, senior vice president of government affairs for the consumer electronics group. But it will take time for the new boxes to reach stores.

The trade association estimates U.S. retailers have 3 million to 6 million boxes at hand.

"The worst case is that there are only 3 million boxes," Petricone said. "Retailers would then run out of inventory by the end of February."

What makes predictions difficult is that the government has run out of money for $40 coupons to subsidize the boxes. There's a wait list of 3.7 million coupons. More funds are on their way as a part of a stimulus package, and if they are suddenly released through the coupon program, boxes could run out even faster, Petricone told the Federal Communications Commission on Thursday.

It's more likely that retailer inventories are closer to 6 million boxes, Petricone said, which means stocks should last until newly made boxes arrive in April.

Nielsen Co. estimates that 5.8 million households are unprepared for the shutdown of analog signals. Some of them may have converter boxes but have not hooked them up. Others may need more than one box.

Many stations will stick to the original Feb. 17 shutdown date, but some broadcasters, particularly in big cities, have committed to delaying their analog turnoff until June.

Petricone said converter box supply has counter-intuitively benefited from the economic slowdown. Since consumers are buying fewer of other types of electronics, manufacturers have spare capacity to make more boxes.